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Sunday, 8 May 2011

If you're an experienced auctioneer you probably already know most of this.

I'm assuming the reader knows little or nothing about playing the auction and will build from there with a series of articles. This first post introduces several key concepts that aren't necessarily obvious to new auctioneers.

Undercutting
Undercutting is posting an item for less than it's lowest price was before you posted. Many players will insist you should only undercut by 1c because that keeps prices high so we all make more and may become abusive if you don't do what they want. However 1c undercuts generally don't work very well unless you're a camper. Most likely the real reason he wants you to undercut by 1c is that he is a camper who will cancel and repost his auctions 1c under your's the minute you leave the auction.

Campers vs normal players vs bulk sellers
Campers are online a lot and pretty much always at the auction house. They are the lowest form of life in the game, especially the ones that bot. Campers cancel and repost everything they sell within minutes after anyone undercuts them. Normal players tend to post their stuff and leave the auction. Campers always undercut by 1c (maximizing profit per item), Normal players will often undercut by large amounts trying to sell their items in spite of campers. Campers attempt to dominate sales, control markets and force competitors out of business by preventing them from selling anything for a decent profit unless they camp too. Bulk sellers are normal players who are so fed up with campers they start posting items in large numbers and at low profit margins to get sales in spiteof campers.

Buy low and sell normal
A common misconception is that you should buy low and sell high. While buying low is of course always good selling high really only works if you're a camper continuously cancelling and reposting your items as fast as they get undercut. Non campers are usually better off selling at normal prices. It's better to sell 5 a day for 10g profit each than 1 a month for 100g profit.

Morning and evening prices
Prices follow many different cycles. There are daily cycles, weekly cycles, patch cycles and so on. One of the more important cycles that many players do not realize exists is the difference between morning and evening prices. Prices are almost always lower in the mornings than in the evenings and the difference can be huge at times. If herbs cost 20g per stack in the morning 100g per stack in the evening and you buy your herbs off the auction in the evening you won't be able to compete with that camper who's online 24/7 on flask prices.

Opportunity CostBut I farmed the mats myself so they're free. No that's a fallacy, the mats weren't free, at the very least they cost you time and the opportunity to do something better / more profitable / more fun with your time. If you could have sold the mats for 100g but instead used them to craft an item that never sells for more than 10g, then crafting that item cost you the opportunity to make an additional 90g.

Saturday, 7 May 2011

I've been playing wow since the original release. In the beginning I was a Miner / Blacksmith and always broke or nearly broke. Smithing was like a black hole sucking up all the mats I farmed and any gold I made usually got spent on mats I couldn't make or farm myself.

A few months before The Burning Crusade I decided to drop Blacksmithing, take up herbalism and sell all my ore and herbs. I wasn't exactly rich but I wasn't poor either. I could farm mats for most things I needed, I could afford to buy the rest and when I spent my whole stake I could build it up again by farming a few hours a day for a week or two.

Then a few months into Wrath of the Lich King I decided to drop herbalism for Jewelcrafting and started making a lot of gold without even trying. I spent most of it at first but always had at least 10k on me and usually more like 20k. Then epic gems came out and I started making even more selling nothing but epic gems and posting just once or twice a day. I farmed and prospected my own ore, sold a lot of gems and spent a lot of gold... Then I got serious about making gold, started buying titamium and epic gems. I was very tightly focused on epic gems and didn't bother with anything else.

Shortly after the honor for gems patch the local auction house bot tried to force me out of the gem market with perpetual 24/7 undercutting. He failed... Miserably... About all he succeeded in doing in the end was giving me a good reason to diversify rather than just concentrating on epic gems. I expanded my business exponentially and made even more gold taking market share away from *him in other markets than he was trying to take away from me in epic gems in the first place.

Now about a year and a half later, I'm sitting on over 3 million gold, completely fed up with guilds, raiding and all the politics involved with both. I find myself reading a lot of gold blogs lately.

I'll read some blog where the author says he's been working the auction hard for 5 years, has maybe 500k gold and figures that makes him some kind of gold making god. If he's such an expert why did it take him so long to make so little?

Or I'll read some article full of effusive grossly over exaggerated comments about how much gold you can make farming such and such or working some tiny niche market. No wonder he has so little gold after all that time. He's doing it all wrong.